Well-traveled DaimlerChrysler executive Andreas Renschler will head a new top management team at distressed Mitsubishi Motors Corp.
Renschler, head of DaimlerChrysler's Smart division, will replace Mitsubishi CEO Rolf Eckrodt, 61, says a knowledgeable DaimlerChrysler source.
The lanky 44-year-old German already is working on a Mitsubishi recovery plan in Japan. He'll start by deciding whether DaimlerChrysler should make another capital investment in the Japanese company. DaimlerChrysler now has a 37.3 percent stake in Mitsubishi.
Renschler oversaw the development of Mercedes' M class in the late 1990s and ran the Vance, Ala., plant where the SUV is built.
His experience in the United States will prove useful. Disastrous marketing policies in the United States are a major cause of Mitsubishi's global financial woes. Last week, DaimlerChrysler dispatched a SWAT team of German executives to Tokyo to address the problems.
Before they arrived in Japan, the team visited Mitsubishi Motors North America's headquarters in Cypress, Calif., for a quick evaluation. "There were a lot of terse words spoken," said one insider at the U.S. headquarters.
According to a company source, Steven Torok, Mitsubishi Motors' executive vice president in charge of international car operations, will leave the company by the end of the year.
Torok, an American and a former Chrysler executive, was dispatched from DaimlerChrysler to help run its Japanese partner. The 52-year-old executive will get the blame for Mitsubishi's woes in the United States.
Last year Mitsubishi's U.S. sales plunged 25 percent. Parent Mitsubishi Motors Corp. wrote off more than $1 billion to account for consumer loan losses in the United States.
"The main problem is the U.S. - it went really out of control," says a Stuttgart insider.
At a press conference in Tokyo last week to discuss the company's turnaround strategy, Eckrodt refused to confirm reports that Renschler will replace him as president later this year. "I'm waiting for that decision" from the shareholders, Eckrodt said.
He claimed, however, that Japanese CEOs typically serve for two years or so. Eckrodt joined Mitsubishi in 2001.
Meanwhile, Renschler and his team of German financial experts and design executives have arrived in Japan. The group will recommend whether DaimlerChrysler should make another capital investment in Mitsubishi Motors.
"Before you can decide on the capital increase, you need a clear business plan and the company should show us which products they need to develop," said a DaimlerChrysler insider. "They are looking at all the corners and they are building a business plan."
A DaimlerChrysler source says Renschler will stay in Japan and replace Eckrodt, whose contract expires at the end of this year. The source says Renschler is there now because the company doesn't want to burden a new CEO with his predecessor's business plan.
"It makes no sense if you send another manager and the business plan is fixed," says the DaimlerChrysler source. "It is better if he sets a business plan and takes over Mitsubishi."